A restaurant chain finds a recipe for growth after years of stagnation.
A storied quick-service restaurant chain wanted to reignite growth. In each of the prior three years, sales had either remained flat or declined. There were concerns that the brand had lost relevance with customers. Franchisees were disgruntled and they were looking to the company for solutions. Management turned to BCG for assistance.
The answer lay in thinking differently, and more deeply, about consumers. The company had historically pursued a traditional approach to consumer segmentation, but it lacked a deep understanding of the distinct needs that drove choice in their category.
BCG’s Demand Centric Growth methodology helped reveal those distinctions.
BCG’s approach identified ten unique emotional "demand spaces" in fast food, each with different needs. This helped the company understand the real reasons consumers made choices and revealed the firm’s true competitive set. It rapidly became clear that the company's right to win was at the intersection of two demand spaces related to flavor and freshness. Most quick-serve restaurants were good at one or the other, but consumers want both and the client could deliver. Armed with a richer understanding of consumer demand and a clearer sense of its competitive advantage, the client could focus its growth investments on products and processes that supported the winning positioning.
Informed by this strategy, BCG collaborated with the company on a broad-based transformation. BCG helped the company rethink and fine-tune its marketing message, menu, in-store processes, and operating model to yield a much more focused and internally-consistent business model.
The transformation has yielded sustained results: 18 consecutive quarters of same-store sales growth with the growth rate in the 18th quarter five times that of its peer group.